1. Structural Changes in Trade Credit Markets in Korea 2003. 11. 10 Joon-Kyung Kim, KDI

2. Declining trend of total commercial bills issued following the crisis Declining trend of total commercial bills issued following the crisis.

3. Following the crisis, s mall and medium-sized companies have received more cash for goods sold Following the crisis, s mall and medium-sized companies have received more cash for goods sold

4. The sharp decrease in fixed investment after the crisis led to the decrease in bills issued The sharp decrease in fixed investment after the crisis led to the decrease in bills issued

5. M itigation of shortage of funds in corporate sector following the crisis led to the decrease in bills issued M itigation of shortage of funds in corporate sector following the crisis led to the decrease in bills issued < The Relationship between Trade Credit and the Extent of Shortage of Funds in Corporate Sector >

6. Advantages of suppliers over financial institutions 1. Advantage in information acquisition - Through the normal course of business, suppliers can get the buyer ’ s information at lower cost 2. Advantage in salvaging value from existing assets - If the buyer defaults, both the banks and the supplier can seize the goods supplied. - If the supplier already has a network for selling its goods, its costs of resale will be lower than that of banks.

7. Different treatment of suppliers between formal insolvency procedure and informal workout Different treatment of suppliers between formal insolvency procedure and informal workout - Supplier is usually just one of non-secured creditor, so he/she would be better off if the ailing buyer enters into the workout program compared with the in-court Corporate Reorganization procedure. * Under the Corporate Reorganization procedure, all the buyer ’ s debts, including bills payable, are frozen. * There does not exist a clear rule in treatment of suppler and non-secured creditor institutions.